Is Starting Your Own Recruitment Business Worth It? The Truth with Edmund Blogg from Recruit Hub

Edmund, welcome to the podcast.

Thanks very much, pleasure to be here.

I feel like we've crossed paths in different ways over the years, but we've never actually properly sat down and done something like this. You've never been on my podcast, but I do feel like it's a bit of a long time coming almost.

Yeah, I think you— we know plenty of people in common. I think we've, um, you've chatted with a lot of people that we work with, um, both on the, on the Hexa side and also um, on your podcast. So I had a bunch of different founders that we've worked with that you've chatted to before, so there's a lot of common ground. Yeah, so yeah, it's been a while.

So yeah, I feel like it's been a long time coming, and also why I'm really excited about this, because I think there isn't loads of people in our industry who can talk from the perspective that you can talk from, in the sense of— which we'll get into your business and your organization has spent huge amounts of time speaking to recruiters about going on that entrepreneurial journey and what the benefits might be and what they might be able to achieve and if it's right for them. And then on the other side of that, now for the last 5 years where we're at currently, you're, you're currently actively supporting 150 recruitment founders. I'm sure there's been more along the way that you've helped launch as well. So I think from the position that you sit in, it's an interesting one, which is why in this conversation I wanted us to sort of approach it in, in 3 ways really. We're going to talk and have a conversation as if I'm someone that is considering or have always maybe thought about starting my own recruitment business, because I know when we prepared for this you said a lot of the, the time and your team spend like actually helping people figure out if it's the right decision. So I think it'd be cool just to talk a bit about what are some of the things that people are most concerned about, what is it that I should really be thinking about, what would be smart things to do, not smart things to do, all of that.

Sure.

Then I think we'll touch on what is it that you consistently see, if there are consistent things that make up a successful recruitment entrepreneur. Be interested to hear your take on that. And then we definitely want to go into the go-to-market strategies. What have some of your most successful founders that you have within RecruitHub done that has meant that they've had the success that they hoped for when they took that risk? And so we've got quite a bit to go into.

We have, yeah, yeah, there's quite a bit there.

So let's start with this idea of trying to maybe help people understand, or help people who are listening to this try and figure out themselves if going on this entrepreneurial journey is the right thing. So we don't want to do like a full role play, but I might try and ask questions to you and talk from the perspective of someone that maybe has 5 years of recruitment experience. I might have worked at 2 different companies. I'm a permanent recruiter in a particular niche. I've been a top performer in the past, but now because I have done well, I found myself managing people and I'm less like on the tools doing deals and in the trenches. Personally, I have a partner, recently bought a home, have some money in the bank. I'm in my late 20s, early 30s, definitely I want a family. These are— this is sort of where I'm maybe at in my life. I guess if I find myself having a bit of a— if I find myself having like an intro call or an initial call with RecruitHub, what, what are some of the things that you'd immediately start getting me to think about, do you think?

Yes. I mean, the first thing we're always curious about is what's the driver, right? Why are we in this conversation? What's triggered the thought that you might want to go out and build something for yourself? So there's a bunch of different things that we quite consistently see which are trigger points for people to start exploring that potential avenue. So you mentioned young kids, for example, is a huge one. A lot of the time we find that there's a point where people start, and it does tend to be when people are either planning a family, have a young family, they start to be suddenly reassessing their lives in a longer term and saying, all right, where do I want to be financially, uh, or professionally 5 years out from now, 10 years out from now? What do I want to be able to create now that I'm, you know, building something in a longer time frame?

I see that all the time. So that's like— I've said that quite a few times when I've met people and they've been like, I started my business and we just got a new home and we just had our first child.

How was it once?

What, what, so why is that then? Is it just like, I've, my thoughts are it's a sort of now or never moment.

Yeah, I think there's an element of that. I think where people think, look, if everything's going to go nuts around me, we might as well just pile more on top of it.

Okay.

Uh, I think also a lot of people, especially if you're looking at it from a child, uh, sort of raising angle, think this is a period of years where I want to get as far ahead as I possibly can so that I'm not having to cover this ground when I've got, you know, a child that's 10 years old, 15 years old, I want to be able to put in the hard yards in the early years so that I've built something by the time that I want to be able to sort of reinvest in, you know, family life, right? So that's a really critical period. I think people feel it's going to be a bit of a shit show one way or another, right?

So let's just, you know, and what are some of the other common triggers then that you found? So you've got family maybe, or like sort of life things happening?

Yeah, so I mean, there's loads. There's obviously, there's a, there's some very positive drivers, and there's some, there's There's pushbacks and pull factors, right? So some of this is organizational change. And so this could be, you know, that there's stuff going on within a business that prompts somebody to think, okay, you know, I've been on a good stable trajectory. I've really been able to just get my head down and know that the track I'm on, that's suddenly changing. And they come up for air and they start to think about, okay, well maybe this opens up opportunities for me. So we've seen that time and time again where, you know, departments are shifting, reorganizing, downsizing, whatever it may be, that pushes the conversation forwards or accelerates people's thoughts where they've had this at the back of their head for a long time, and then suddenly, you know, the business forces the issue. That's one thing. Another thing tends to be over time, you know, people just in certain situations will do the maths and they'll sit there and think, you know, especially if their performance is really starting to progress significantly, they will be looking and starting to question, am I getting the most, you know, the most the highest possible financial return for everything that I'm generating. And that, that there are some areas where that's particularly pronounced, and it does tend to be where somebody is really solidly delivering the full kind of value cycle to the clients. They are completely 360, they're winning the work, they're filling the work, and they're really feeling that the, the, the dynamic that they have with the place where they're employed is no longer a strong reciprocal balance. The learning curve has flattened off and they're starting to feel day in, day out, you know, I'm, I'm the one that's making this happen. And the economic arrangement that we have here is no longer optimal. So that kind of— that can come at different times in people's careers, but that's obviously a hugely natural part.

Yeah, no, that's really— yeah, I'm not surprised about hearing those, like basically professional change, organizational change, life change, and then the earning piece, which I feel like is the sort of easy carrot for like the LinkedIn stuff, isn't it? Like, earn, you know, earn more. Like, just interested then, because I'm sure you've seen a lot, this won't like apply— this can't be like a blanket approach. But if I'm— what's like a bad earnings, if you get what I mean? Because I think you see a lot on LinkedIn in the sense of like, if I'm listening to this and I feel like I resonate with what you're doing, I'm delivering a lot of value to my company, I'm earning good money— but you don't know what you don't know, right? So Like, if I'm Bill, if I've built consistently 300 grand, 400K, whatever the number, like, what's bad? Do you know what I mean? What have you seen? Like, what should I expect as an employee?

Sure.

Because you're interestingly placed to see that, because I'm sure you also go, well, actually, you're not in a— you're not in the worst position. Like, you're actually earning good money.

It does happen, does it? We chat to people and we'll say, yeah, realistically, you, you've got, you've got a great deal. Um, and you know, there's a marginal gain potentially, but there's also some risk associated with it. So you've got to go figure out, do you want to take that that risk. Um, I mean, if you want to get into sort of more detailed numbers, it depends massively obviously on what you're doing with your business, right? So if you decide I'm a £500K biller and I want to go and port that across and be a £500K biller under my own agency, and I wanted to strip out every penny of profit I can and put it in my pocket, I'm not reinvesting in growing my business, I purely want to do an apples for apples, and I was a half a million pound biller, half a million dollar biller, I'm going to go and do it for myself. Um, You've got a bunch of efficiencies, right? Owning the full fees is obviously the key thing, right? That is your revenue. You've then got tax efficiencies in running that through a limited company. And there's, you know, some significant advantage there versus a sort of employee PAYE structure. So you will probably find in terms of net take-home pay, if you run a lean business, that can get you anywhere from a 50% uptick on your take-home pay after tax up to potentially 100%. So double the earnings for the same amount of billings.

Yeah, I'm not surprised to hear that, to be fair. And again, that's pretty black and white. You put a good caveat on that in terms of like, if your aspirations are Apple for Apple, just smash it out. Obviously it would be different if you want to go on a growth journey or even hire a couple more people. It might look slightly different, right?

Totally different. So I mean, to your earlier question, like, what would we go through with somebody who was exploring this topic? We've got a pretty set process that we run through. The first thing we would do is, is, is just sense check a few kind of early, you know, elements of their situation, make sure nobody's about to go and waste a bunch of time, that there's nothing here that's going to be an evident showstopper. And I'll explain a little bit about kind of what we look for there. The second bit that we would get straight into is financial forecasting, because the biggest thing that we see is that there is a gigantic sort of hazy knowledge gap between this idea that, OK, I'm doing well within my employed environment, I'm pretty sure that if I were to be a successful entrepreneur, the economic outcome's got to be better, right? But how much better? How long does it take? What risks?

Not sure.

What am I earning in the first 3 months, 6 months, 9 months, 12 months? What if I scale? What if I grow? What if I don't? All of that is up in the air. So it's a question of, I know what happens if I stay in my current job. I've got a pretty good idea what happens if I go into another similar type of job. I might get a bump in base, I might get slightly better commission. But then there's this giant question mark around what happens if I go and do it on my own. Right? And so what we spend a lot of time with people doing is modeling out different scenarios so they can really start to understand not just a big pie in the sky, you can go and sell a business for $20 million and sail off into the sunset, right? Which is, which is one of the outcomes that's possible. But there's no point in modeling out, you know, sort of random, shiny, attractive scenarios. It's much more helpful to really get granular. And so we need to understand your market. We need to understand your sales cycle. We need to understand your billing track record, you know, how feasible is it for you to replicate the numbers that we're using to sort of input and drive a set of forecasts? Where are the gaps between your historic performance, the environment in which you perform, blah, blah, blah? How does that map across into what your startup could potentially look like? Then let's kind of twiddle all the dials, how the startup itself could perform, so that you can see not just the top line numbers of the business's own P&L projections, but also how that can potentially flow through into your pocket, right? And then there's a decision that every business has to make around how much they're drawing out of their company, how much they're reinvesting into it, etc., etc. So that in itself is probably the number one blocker that stops more people from making the jump, is that there are so many unknowns. And, you know, there's all sorts of complexity in that, you know, modeling scenario that, that need to be understood. There's tax implications, there's, you know, 1,001 different variables. But then there's also having the confidence to know that even if you've got the information to build and sort of easily adjust and manipulate that model, you're also doing that with the right kind of context that it's reasonable and sensible. So in our world, what is totally unhelpful for us is to sit down with somebody and bang in a bunch of glossy-looking numbers into a P&L and go, there you go, you're rich. That's you running a $5 million business, good for you, obviously do it, right? It's just, it's unhelpful because we need to try and get as close as possible to what is likely to play out. And there's a lot of stuff that we need to understand in there, which can be a factor of, as I mentioned, a bunch of different market specifics, but also restrictive covenants, for example. Sure. How quickly somebody— how much somebody needs to take out of their business early, how comfortable they are to forego near-term earnings for long-term potential upside. All that kind of stuff needs to be taken into consideration. So the approach that we take is, let's try and build a set of forecasts. Which are pretty conservative, which kind of haircut a lot of your projections, you know, really say, if we only do this, then let's have a look at the outcomes. If the outcomes in that situation are still exciting, then it becomes a bit of a no-brainer and we say, let's try and make this happen. But that's the important thing. And obviously we spend a lot of time with people that will come in and say, I built $400K last year, but I reckon if I didn't have to go into so many management meetings, I could do $750K. And we'd say, you maybe can, but we're not sitting down and modelling out as a base premise for your forecast that you're going to go and do something you've never done before in your entire life. So it's all about trying to sort of look at not exactly worst case, but base case. And then obviously we can in that same conversation with people show them, let's ramp up some of these numbers and look at what are kind of— exactly, exactly that.

I think that's such a great insight because something I've learned in my business is, I don't know if you agree with this or not, but You often hear this phrase of like, top players don't make great managers. But I think what's also fair to say is like, top performers don't make great operators. And I think you either have to learn that the hard way from the founders I spoke to, or you have to have the humility to go, I don't— I'm not actually very good at this planning stuff, and I need to get expertise, or I'm going to invest in developing myself. And I've just experienced that this year when I think of the companies that we partnered with then went out of business. I think they've had to learn the hard way of like, oh shit, I didn't, I didn't plan for this tax bill that I was meant to have and these things, right? And when you are in that employed environment, how much exposure do you get to that? Depends, but a lot of the time not a lot, right? Unless you're running your own P&L and your team and stuff like that. But even then, how much oversight do you get on PAYE, National Insurance, different things that you have to pay for.

Sure.

So I think that is such a great insight because it isn't as simple as, well, if I didn't have to give all this money to my employer and I didn't have to manage all these people, I will build X. It isn't as simple as that, right?

Yeah.

What's really cool about now, how long you've been doing this, is the more you do, the more you've done this with people, probably the more accurate you can be as well, because you're going to have even more data, right? I think what might be helpful for people, if you don't mind sharing— I know you said there's a lot of variables, but I think this would be helpful regardless. What if I was to say to you, Edmund, I've done a minimal viable plan? What would you expect to see on that minimal viable plan? Do you know what I mean? In this scenario, I think that'd be helpful for people. Like, what would you expect to see on that plan that people could go away and do and go, okay, if I took this risk, sure, this is what it might look like?

Sure. So I think, happy to answer that. I think the first thing that I would just quickly add before that is that this is one of the interesting things in, in the work that we do is that this concept that I have to have spent the time to develop a plan before I'm in a position to talk to people about potentially building a business is one of the biggest constraints that stops people from actually getting on and doing it right. So we've worked with so many people where they've said it's almost a consistent first reaction as soon as their business starts to be successful is, I wish I'd done this years ago. You hear it over and over again. I wish I'd done this 4 years ago. You know, I always thought this was a super mysterious, difficult, complex thing that I was sort of somehow waiting waiting for the universe to tell me I was ready to do. And that's why I said, like, often it is external change sort of shunts them into situation like, okay, I think I'll just have a crack at it, why not, you know. Um, when that happens, they then realize, I could have done this a long time ago, right? And, but, but one of the blockers is I think people are hesitant to go and have a conversation with somebody because they feel like they think they need to have— I haven't got my business plan. Why haven't I got my business plan? Because I don't know how to build a business plan, and I haven't got any time to build a business plan because I work a full-time, long hours I'm good at my job. One of the reasons I'm probably good at my job is because I work long hours. So at the back of the head, you've got this thing of, well, when are you going to find 5 hours to sit down and learn how to write a business plan and think it through and then like sense check it to the degree that you're comfortable to go and share it with somebody else and not feel like, am I going to present something that's ridiculous and going to get laughed at? So that's a huge part of what we do is saying like we have zero expectation that you will have built a business plan. Right, so we work through a series of steps with people who are exploring this idea, but the number one thing is you don't need to have a plan to start the conversation.

That makes sense, fair.

But what we would get to would be we would develop together a set of financial forecasts, as I mentioned. We would do that very collaboratively with the prospective founder where we'd ask a lot of stuff around their background and their performance and their market, and we try and make sure that we're confident that we're not over-egging the numbers that we're putting into this based on what we know about the tailwinds they'll have coming into it, the headwinds that they have to contend with. But also, you know, we'll get to this, I guess, in a second. The other key piece for us is this concept of the go-to-market strategy, right? Even if you've got a beautiful-looking set of financial forecasts and say, I can't see any reason that this won't happen, you still need to know how are the wheels going to start turning, right? Your sales tyres need to grip, and that business plan actually needs to start to come to life. And that's another massive piece of the planning. Which again, we don't expect people to have done in advance, but it's a critical piece of the risk assessment for the prospective founder. If you're going to jump without a parachute and say, I'm quitting, you know, employed life and a stable salary, and I'm going to go and do this, knowing that you've got a nice-looking spreadsheet behind you that someone said, that seems reasonable to me, obviously isn't enough. So the piece for us is very much around the first sort of 30, 60, 90 days is important, but really we're looking at the first 6 months And what we're really trying to work with founders on is visualizing where those first fees are coming from and getting really granular on where are your first placements coming from, who are these clients, why are they working with you, how are you initiating those conversations so that people don't spend the first 3 or 4 months, you know, wandering around knocking on doors trying to figure out what works, what doesn't work. Because if you have a plan for this is the market I want to work in and you have a financial forecast behind you, but you don't have the missing piece, which is how are you going to actually start the engine and get some cash in the business, then, then the risk is very, very high.

Yeah, so we definitely— let's— we'll definitely cover that because I think, again, you're in a really cool place to comment on like what you've seen work. True, different things. But I guess if, if I was someone that has maybe caught up on that planning bit, what, what would be a minimal viable plan? What would you want to see on there as a recommendation? Uh, well, I know you're saying that, that you don't have to have that to like start getting the wheels in motion or help yourself understand, is this the right choice or not? That makes sense why that's a blocker. But what would be a helpful minimal viable plan versus just going into it? Because I'm sure you've ended up having conversations with people that did the opposite. They took the leap and then they're like, shit, I had no plan, I don't know what I'm doing. So what, what could, what could make up a minimal viable plan?

Yeah, so, so we, we would absolutely— I mean, the number one thing that we would want to start with is what is— I mean, this is underpinning everything— is what is your niche? What is your specialism? And that in itself is a huge, huge topic because there's all sorts of different ideas around what constitutes a niche and what constitutes a specialism, right? You can slice and dice markets in all sorts of different ways. What we're looking for is a really coherent alignment between a specific talent community and a genuine scarcity or need for that talent in a specific type of organization that needs to hire from that talent pool. And ideally for us, and this is where we get into kind of, you know, what's the alignment between your background and your startup, there is a very strong understanding of that space and strong network within that space. That's the foundation of it. And so for us, like where, where sort of alarm bells start ringing is if that niche is something like, you know, I do software engineering, right? And we think that's not a niche, right? It's it. And even if someone goes, oh, I do software engineering, for example, in I don't know, fintech, again, we would look at it and go, that's not a niche, because we need to know that you've got access to very specific candidate bases, candidate communities, where there are employers who are willing to pay a premium to access those candidates that they can't reach themselves or they can't, you know, sift through or select. But when somebody doesn't have a clear enough definition of who is their ideal customer profile, so their ICP for us is really, really important, What is the type of organisation that is going to transact with you? Why? What is the pain point that you're solving for them? And why is it that your proposition is going to be a winning proposition? Like, what is your value proposition? So to answer your question, we need a really tight definition of the ICP. We need to know what the value proposition is. And then we would want to have the client acquisition strategy, which is bundled under the go-to-market. How are you going to go and start these conversations?

Nice, solid.

Does that make sense?

That makes sense, yeah. There's some good headings there. Get down to Google Doc, think about it, break it down. What— that's interesting what you just said there. So let me know if I've understood this incorrectly, but what if I come to you and I'm like, I've been doing this market and I know I have all those things ticked, but actually I want to do Web3, this particular niche. How would you feel about that? Would that make you feel a bit uneasy that they don't have— they've— it's— I've ticked all those boxes, but I don't have those relationships or candidate pools. I just know they exist.

Sure, sure. Yeah, no, it's a great question, and we do have this come up a fair few times, and we've explored it a few times with people that we've worked with in the past. So the first thing that we will always look at is trying to help people figure out whether or not they— and there's no easy answer to this question, but we will spend time with them trying to understand, is there any benefit in leveraging where you do have an existing base, right, in order to build the early cash flow and the early foundations of your business, and then reinvest in going and exploring new markets? That's the first thing we would look at, because we would say, And, you know, one of the concepts that we've come to use a lot over time is this idea of red, amber, green assessment of somebody's go-to-market strategy, right? And what that means for us is we will look at how they're going to target companies, how they're going to start initial conversations, how they're going to get their foot in the door, how they're going to build those relationships. And we will look at all of their plans to get the kind of early piece of their business development traction moving. And we will assess it. And we're not gonna sit with a crayon and colour it in, but we will go through like the thought exercise of green for us means this is something that you have proven recently again and again and again. This is literally what you're doing day in, day out, and it works. And there's no reason that we can see together that you wouldn't be able to do this in your new business. Amber is somebody saying, I've done a bit of this, but not much. There's not much sort of base of evidence, supporting evidence, you know, done it in the last few months and it's worked okay, or I've done it a handful of times, or I did it 4 years ago and let's hope it still works, right? Red for us is this is totally unproven, right? So if we go through somebody's go-to-market plan and it's all red and amber, we'll be questioning whether or not that's a sensible—

the right partnership.

Yeah, if that's the right partnership or if it's the right way for them to start their business. If it's green and there's a smattering of amber and, you know, the amber's got some good ideas and there is some supporting data, there's not much of it, it's a different situation. So we would never be in a position to say to somebody like, don't do it, because people have started, people have pivoted on a dime and gone into a totally new sector and done extremely well. We've had customers who've worked in the UK market all their lives, for example, started a business, just focused on the US, just never looked back, done brilliantly. But we need to be really secure that that we've sense-checked how they're going to make that happen. They're not just saying, ah, can you do the US market, and we'll see what happens. Right? That's the big thing for us. And the real reason that that's important is we need to be in a situation where you could say, if we are 30 or 60 days into this business and we're not seeing the traction that we'd forecast, we need to be able to diagnose where it's gone wrong. And if there was no go-to-market plan in the first instance, there's nothing to diagnose. There's no— we can't go back and say, okay, well, we had these assumptions, this is proven to be true, this is proven to be true, this is the bit where we're having trouble, let's try and sort of engineer this or change, you know, some element of this piece of your plan. That's really obviously massively challenging to do if somebody hasn't really got a plan to start.

I was gonna say, that's the big benefit of having a plan, isn't it? Um, what— and then having this approach, have you found— because something that I've often run into when I speak to first-time founders who have gone, I can't believe it's taken me this long to do it. Often the fears are they haven't been on the tools for a good amount of time, because if you have done well in recruitment, typically, not always, you're going to find yourself managing, leading, doing elements of that. And then they might have been away from doing the deals and these things for a little while. So oftentimes I'll hear like that was one of my biggest fears. Could I do it still? Could I still make those placements? So I guess thinking about these things, having a bit of a plan around this, have you found that also help people that maybe have that fear be more confident? No, actually this should work and I can do it.

Yeah, definitely. I, and, but I think like it's, it's only fair to say if you have been off the tools for a long time, there's, there's two different kind of possibilities there. There's you've been off the tools but you've stayed very close to the same market, you work with a team of people in that same space you're coaching and guiding and managing them on a daily basis, and you could in theory just parachute in and join the team, right? That's one situation. It depends what team you're managing, and it depends what markets they operate in. If you are running a sort of multidisciplinary or multi-market team and you're off the tools and you yourself have, have got no network, that is a different situation. And that's probably a situation where we've had that a couple of times with people that we've worked with, and it's a slower ramp period. Inevitably. So they need longer runway, and they need to be ready for the fact that there's probably going to be more trial and error in their plan than somebody that's right, sort of red-hot, working on the coalface every day, just, you know, does it under their own banner. So that's a challenge, right? So examples of that, you've got somebody, let's say, that runs a team, and they've got, you know, a guy that does, or a girl that does DevOps, somebody else doing, I don't know, you know, blockchain, they've got somebody else doing, I don't know, cloud, they themselves think, I really don't have a network, right? Clients don't know me. None of our customers know who I am. I'm behind the scenes. And if I were to start something, I suppose the simple way of looking at this is whenever we're in conversation with someone who's saying, I'm trying to figure out what market to do, that's a massive indicator that this, this business, if it does become a business, is going to need extended runway or is going to need to have an extremely sharp go-to-market proposition. That's the first thing.

That's really good share. What have you found then? I don't think— I'm sure you'll look at different people who work with RecruitHub and you'll probably say, God, that person is so different from that person. But like, are there like typical characteristics, typical experiences that people have been on that you found to then lead to being successful entrepreneur, recruitment entrepreneurs? And I know you can define success in different ways, right? So let's just define it as someone that on their plan said they wanted to do this and they achieved it, whether that be just them earning really good money or it's them and growing their team. Like, is there anything that you would like, I don't know, characteristic-wise, experience-wise, go if they tick these boxes I'd bet a good amount of money that there's a good chance that they're going to succeed. Like, what does that look like?

For sure. Yeah, yeah.

What are some of those things?

Yeah, so, so there's, there's definitely a handful. So, and it's interesting to look at it the other way as well, which is, you know, what disqualifies people, because there's a fair few of those too. Um, number one is, I think, like, almost the most foundational skills, they have to be really good at BD. Massively important for us and for them. That, that is something that they're really, really good at doing, but also something they really enjoy doing. So all the most successful founders that we've worked with, you know, they're very keen as soon as their business starts to get a bit of momentum to start building a team to look after candidate origination delivery, because the bit they enjoy is go out, network, win new clients. That's, that's their real rainmaker skill set. So that's really, that's critical, right? That's the base of everything, which is why One of the big sort of disqualifiers for us normally is if somebody says, I'm a 180 recruiter, or I'm a researcher, I'm a resourcer. It doesn't mean they can't start a company by any stretch, but it's a huge consideration to think about if they're saying, you know, I've got such a great network, I'm filling jobs, you know, left and right, I'm pretty sure I can win business. It's a huge unknown. So again, if you look at kind of the red, amber, green area, right, that's bright red. So the BD is absolutely massive. If somebody's really strong at business development and they back themselves and they've clearly been able to build markets, or they're still, you know, consistently winning customers, that's really important to us. That's always been one of the major characteristics. Um, I think if you, if you look at kind of what is common across our founders as well, I mean, there's some obvious stuff, right? They're mostly top or high performers within the business environments they've worked at. They are competitive. And one of the things that we found really interesting about what we're doing is seeing how much it affects people not to be in a competitive environment when they start on their own. That's really, you know, they're hardwired to be on leaderboards, to compete, to win prizes, and then suddenly it's all gone.

It's just them high-fiving themselves.

Yeah, it's tough. So that's really interesting, but that's always been a key part of what they do. The other thing for us is that, and it's obvious in many senses, but, you know, they're super on top of their numbers. They know exactly what they're generating. Then, you know, it's effortless for them to kind of give us the information that we need to understand.

They know their numbers.

Yeah, back to front. And, you know, most of them are very, very commercially astute and they take to like the financial management of their businesses well. It doesn't mean they've done it before. It doesn't mean they've got any prior training in it. Most of them haven't. But they are comfortable and they get kind of core economic concepts quite quickly. Especially if they're given a helping hand and they're given, you know, a framework to work with.

Um, but other than that, you know, they just got, you know, about like, what's like, there'll always be evidence to be like, to say that this isn't true, but like, what's too early? Do you know what I mean? Like, there'll be loads of people out there that had like 6-month experience and then started a recruitment business and it was successful.

Yeah.

But have you got any like insights there out of interest? Like, what, because more from the sense of If, let's say, my inner goal has always been to start my own business, and that's our long-term goal, there's a benefit to learning on other people's time, resources, these things, but you know deep down that's what you want to do. You're not in a rush. Like, what is a good amount of experience, you know what I mean?

So I think the average of people that we work with, probably between about 5 and 8 years of experience. Okay, interesting. Is probably about average. The lowest end would be 2.5 potentially, but we'd have to kind of see something pretty extraordinary in them, some real hunger and some kind of, you know, an older head on their shoulders than their years would tell you. And there are some people obviously that just say, well, I'm just going to do it. So, you know, I'm going to either do it with you or not. And, you know, we'll go through that process with them. But we would definitely say, like, if you're thinking, well, I've done a year and a half of recruitment, I've been all right, What am I waiting for to get started? I mean, usually for us, like that 3 to 5 year period is still at the lower end of the spectrum, but certainly kind of 5 to 8 years is, you know, the important thing is you need to have seen, you need to have gone through a bunch of cycles. You need to have seen stuff play out, different types of markets. Yeah.

Like you've had 18 months experience and you started in 2022 or 2021, right? Yeah.

Very, how many placements can you possibly have done? You know, how many of those can kind of possibly fallen out? How many clients can you've lost and re-won? Or, you know, all of this stuff that you kind of need, you need to get the reps in before you feel really confident. I can't know exactly what I'm getting myself into here. I can handle this, I can run this myself. I think, I think 2 years.

What about, again, I know that I'm— there's no like, if you have this, you have this, then perfect. But I'm just curious to hear your take because you're interested in the position. But what about like working for one company? Because that's also interesting, I think. Yeah, because there's benefits to that, and then there's cons to it if you start on your own. Like, you don't know any different, and you're now out of those four walls, and you're, you're, you've just done— you've always known one way. Have you seen anything around that in terms of like benefit? Like, it's beneficial? You found that actually, you know, someone that we speak to and work with that has worked at least two different companies or three different companies, there's actually some good positives that come with that when they then decide to start their own business versus one company for 7 years?

Yeah, for sure. Um, I mean, I'd say there are, there are pros and cons to each one. I wouldn't say, being honest, that there's any, there's any kind of rationale to say one is better than the other.

Fair enough.

I don't think that's true. We've worked with people that have been mostly in one agency and they've done brilliantly in that agency. They've learned a lot along the way. It hasn't really clipped their wings in terms of their evolution or their, their sort of progress as a professional, just because they haven't been in a bunch of different environments, because it hasn't been necessary for them to achieve what they have achieved, and it isn't necessary for them to go on and achieve what they want to achieve with their own business. But people have, yeah, been exposed to different kind of flavors and ways of doing stuff. That's great, gives them more ideas potentially. But equally, it's also a question of, like, to what degree are they actually absorbing all of those good ideas and then carrying them forward into their business? You know, maybe not. Maybe they've seen all sorts of brilliant incentive schemes or great ways that people, you know, do marketing, and, you know, good for them, but it's not necessarily something where they're going to carry every single grain of that into what they're going to go and do. So for some people, it's been a great you know, advantage to see different ways that things can be done, and that's helpful, but I wouldn't say it's a prerequisite. The opposite is probably the only outlier case. If someone's been in an agency for, you know, 19 years and it's all they know, then the risk there is that's going to be quite a shock to the system because that is literally, you know, a huge chunk of their career. But outside of that, there's not, there's not much in it, I wouldn't say.

Before we go to go-to-market then, what Is there anything else that might be worth sharing in terms of, like you said, you said mention some of the things that you've seen that have led to successful recruitment entrepreneurs? What about the opposite then? Is there any, like, red flags, let's just say, that you've often found to be true when it comes to maybe isn't— is it the right step, or maybe you want to think about this first?

So I suppose given the nature of our business I've got a certain view on this from how our sort of our organization looks at it, which is not, you know, necessarily completely representative of the wider market. I think we are more hesitant to engage with people where they are looking within their startup to go and do something radically different from the success that they've had previously, right? That's just one, because, you know, people will come out of the woodwork and say, I've got, you know, I've got a brilliant idea for a subscription model, or, you know, I want to create a sort of, I don't know, talent matching platform. Not to kind of, you know, be sort of anti-innovation because there is, you know, opportunities all over the road, especially more as technology kind of evolves faster and faster. But that's not our bag. So that's one thing that we're, you know, less excited about. If someone says, look, I've got an amazing network in this market, I've built, you know, fantastic numbers, I've built and scaled teams. 'But I'm going to go off and do this,' like, that wouldn't be something that we would partner with. So that's one thing. It's not a red flag necessarily. The other thing is, as I kind of alluded to earlier, is like, if there is too gigantic a gap between how they've been successful. So if somebody, for example, that says, you know, 'I've worked at a very, very large multinational staffing agency, and I've, you know, got billed 10 million last year, but it's because we've got this gigantic account that I've got a delivery team into. I didn't win the account. I don't really even understand how the commercial— the account— I'm the account director.' billings are under my name. But equally, you know, are you going to be able to replicate that when you go start your one-man show? That account's not coming with you, evidently, and you're not positioned to go and replicate that kind of success. So that's a concern for us. I think the other thing would be if people are starting a business for the wrong reasons. That's always, that's always a concern. And that happens, you know, people, people get, I don't know, aggrieved with something that's gone on within their business, their relationship with their boss, If there's a sort of, you know, really negative angle to why they're starting something, if they want to go and prove a point or, you know, I don't know, aggressively kind of take market share off somebody, particularly if it's something along those lines, it's never a fit for us either.

And that's because that wanes over time, right? In terms of like, is that still going to keep you going in 5 years' time?

Yeah, exactly. Yeah, yeah.

And I don't think there's— I don't think there's elements wrong with that at the beginning, maybe, of your journey. Like, no, these these people always said like, no, you need us to be successful and all that. But if you're still going off those fumes, right, longer term, right, that can't be your business plan, can it? It's got to be bigger than that.

Yeah, you've got to be thinking like proving your boss wrong. Exactly, exactly.

Okay, let's get into these go-to-market pieces then, because I know a lot of people will be interested in this. Before we do, covenants— what are we saying? What's like the— my— whenever I speak to a founder, first, first-time founder, I always give the same advice, which is just play it with a straight bat. Like, that isn't legal advice, it's just like I haven't looked to their covenants, anything like that, so they might be able to do whatever they want to do. But I always just say to people, just play it with a straight bat. It's not worth trying to cheat the system, because from the conversations that I've had where then their old employer has like sent them letters, these things. It's actually— there'll be plenty of stories around the finances and how that affects people, but I've found from the conversations I've had, it's actually how it's affected people mentally. Because you start something new, you're excited. I think when you're— when you start a business, you have that period where the adrenaline's high, people just sending you messages going, oh my God, Edmund, congrats, well done. 3 months go on, 6 months go on, and no one's sending you messages anymore, and it's just down to you to make things happen. And if within that you get letters from your boss going, Edmund, we know what you're doing, we're taking you to court, yeah, it's how that can affect you mentally versus the bill.

Sure.

So how— what's your like typical advice to people? How do you feel about that? Obviously I feel like you have resource to look at these things, right, and go, well Sure, they can't really say anything about that. Sure, you do that.

Yeah.

So let's just chat about it for a bit because it is a big part of that go-to-market piece.

It's a huge part of it. And, you know, when I said earlier, one of the biggest blockers is people thinking, I haven't got time to plan, to make a business plan. I haven't got time to figure out whether or not this is something I should or shouldn't do. Therefore, I just shelve it. I can't go and have a conversation with somebody like our business because I'm not ready because I haven't built my plan. The other massive blocker is people thinking, well, I've got restrictive covenants, so I can't do this. So we always— I think every, every case is really, really individual is the first point. Okay. So, so I would 100% agree with your, your general advice, right? Play it with a straight bat. Absolutely. There's, there's no question around that. But there, there's— we always explain to people there's different layers in this situation that you need to be kind of aware of in terms of how you navigate it. There's obviously what's actually written in your contract, which, you know, you may not know, right? But literally what the document says. There's what's legally enforceable, which might not be the same thing as what's written in your contract. If something in your contract that isn't legally enforceable wouldn't stand up if it were challenged in the court. So that's the first thing is you've got already a gap there.

Yeah.

Then you've also got what your current or former employer thinks is enforceable, which again are two different things. So they can come and make your life really unpleasant on a trajectory where ultimately legally they're going to lose, but that doesn't stop them from being disruptive and noisy and potentially expensive for you to get rid of. So you've got to think about all these different things. What does it actually say? What is actually enforceable? What does my boss think is enforceable? And then wrapped around that is the whole dynamic of how likely are they to want to try and, you know, disrupt my business and enforce this, which is linked to, in large part, sort of how you manage your exit out of the business. So most of what we're trying to do to people is explain like, this is actually what is enforceable within your, contract, right? Here's what you absolutely cannot do and shouldn't do and totally wrong if you do do and will, you know, get in trouble if you do and it's on your own head. Um, here's what technically you can do because there's no need necessarily for you to go and start a business and adhere to restrictions that are actually fundamentally not enforceable, shouldn't have been in your contract in the first instance, right? So one thing is trying to make sure people understand what space can they operate.

What are some of those things?

Well, some people commonly, I know, commonly people have, you know, agreements that say you can't start a competing business. Right, that's it.

That's not enforceable.

No, no, because, because what is— so, so the general sort of broad shape of this for people to take away and understand is that your— the restrictive covenants in, in your contract, to be enforceable, have to be deemed to be proportionate essentially to the business's legitimate interest in protecting itself from risk, right? So you're not essentially, in, in simple English, allowed to walk out the door with confidential information or relationships that gives you an unfair competitive advantage as a result of having been recently employed by that business.

Right.

So everything kind of flows out of that in terms of, okay, so what constitutes a client, right? Well, it can't be every business that they've ever worked with. Okay, so we need to sort of bind that and talk about what is a client that you particularly shouldn't be able to work with. That's the ones that you've personally serviced. Okay, but I've been here for 8 years. All right, well, the ones that you've personally serviced within the 12 months preceding when you actually left employment. So everything is sort of boxed off to be proportionate, but sometimes it's not. And if it's not, then it's mostly non-enforceable and it's not the job of the courts typically to make it enforceable and say, well, we'll add language in here. So if it's unenforceable, it's unenforceable, right? So there's an understanding there for people to have around how contracts actually work, which is good for them when they go on and run their business anyway. But the key thing we are looking at is, okay, this is kind of, you know, the pieces of it that actually are enforceable. But then it's also thinking about how are you going to manage the narrative or the dynamic with your previous employer when you leave? And that's again like a whole spectrum between you saying, I'm resigning, I don't know what I'm going to go and do next, I'm going to think about it.

You're not being honest.

Well, so this is one scenario that could potentially play out is you go in, you basically keep your cards close to your chest, you essentially lie, say I don't know what I'm doing, and then Tuesday morning you pop up with a fully cooked brand that looks like a direct competitor and it goes down down extremely badly, but it also makes people very paranoid, very cross, they're very bitter about it. And a lot of people, you know, who are successful within a recruitment business have been really well trained, right? The reason they're successful is because people have invested in them, they have taken time with them. You know, a lot of recruitment businesses, there's a lot of really good, you know, healthy social bonding. So people are generally like, they're mates with each other. So there's a lot of stuff there that's all packed into this issue. So yeah, you've got a contract, But you've also got relationships to think about, right? And you've got to, to some degree, work out how do I play all of these cards in a way that gets everybody into a fair and reasonable place? Because it is fair and reasonable that you should be able to go and start your own business. It's fair and reasonable that you should be able to go and build a business that isn't eating off their plate in a way that is unfair minutes after you've left their employment. They're entitled to that protection. But at the same time, it's unreasonable for them to feel like they own you. Just because you've worked there, you know, you've worked there under an employment contract, you've been paid. They haven't trained you because they haven't done it, you know, after hours for fun. They haven't trained you, you know, trained you to be better at your job so that you will deliver more for their business, etc., right? So it is a contractual arrangement. It's not something that should be held over your head for the rest of your life. And so that's where we work with people, I suppose, in that situation, try and figure out what's the best way here to de-escalate all of this so it doesn't spill over into something that's really acrimonious. Because at the end of the day, it's a waste of the company's time to pursue somebody that's not doing anything wrong, and it's a waste of their time to have to, you know, fend off a bunch of fallout that they could have preempted. So you really should then just be left with a bit in the middle, which is if you leave and you violate your restrictive covenants, then somebody comes at you. They absolutely should. It's a shame they have to, and you know, you deserve it if your business is hobbled as a result because they've got fair, legitimate legal protections.

That's a good breakdown.

It's an important topic. It's a really important topic because, you know, there are people— I spoke to somebody yesterday who said, well, the big thing that's, you know, challenge here is it says I can't compete. And they say, you know, I mean, they've been in their business for 11 years.

This needs to be fact-checked, but aren't they looking at this in the UK? I know it's different in the US, isn't it? Uh, it's different. It needs to be fact-checked.

I haven't got the And again, this— I'm not an employment lawyer, obviously, so this isn't legal advice either. Um, and yes, it's changed, it's being reviewed in the US, and US has got different state requirements as well.

So, and in terms of this whole someone's starting a competing thing, because there's arguments to say that that's stunning entrepreneurship and things like that, isn't there?

Well, so it's the bits I've read. Yeah, and it's— it is, it is, it is a complex topic, right? Because you've got multiple things in there. You've got non-competes, which are not the same as non-solicits, right? So, so non-competition is you can't commercially do the same thing that we're doing. Non-solicitation is you can't take our customers, you can't solicit them for business, right? So those are two different things to start with. If you look at the US, you've then got multiple different states which have got different interpretations of how much they are comfortable with people competing, right? Right. So you go as far as California, it's pretty much Wild West. You can do whatever you want, no one can touch you. You've got other states which are a bit more employer-friendly where they back the employer. You've then got, there's maybe more detail than you wanted, but you've got other things like there are states where the courts will say if the clause of your, you know, restrictive covenant isn't proportional, we will make it proportional and that'll be our fair settlement. You've got other states where they'll say if your clauses aren't proportional, that clause goes in the bin, doesn't exist. You know, that was a mistake of the business that didn't draft it properly. So it is complex and it is technical, but the broad, again, like concept that most jurisdictions adhere to is that you shouldn't be able to unfairly restrict somebody's right to exercise their trade, to earn a living by doing what it is that they do that they're good at doing, right? As long as the business is afforded reasonable protection, that it's not having a bunch of, you know, important and proprietary relationships or confidential information walk out the door with somebody who is no longer an employee. But that period can't go on forever, which is why you've got, you know, either a 6 or a 12-month typically period where the business is given some protection so somebody can't get a running start on competing with them unfairly.

Yeah. If you have anything above 12 months, that's just silly, isn't it? That's not going to be—

it gets harder to enforce. Yeah. But again, depends on role.

6 months and 12 months normally.

Yeah. Yeah, typically.

So why don't we get into then what— we can start with like 3 maybe, if we were to like condense this down, but like go, you know, that go-to-market part of the plan. Maybe let me give you this bit of context and then it can help you think about what one of these might be or what you've seen your founders do really well. But this past few months we've been hosting some like solo founder dinners And I'm sure you run into this, but something that always comes up when people share their, like, most pressing challenge or topics they want to discuss on the night is this idea of, like, how do they in a compelling way communicate what their offering is different? Or, like, how do they deliver that and communicate that that makes the end customer feel like what Edmund's offering here is different? I guess I'll just chuck that to you in terms of— I don't know, that's something I run into quite a lot.

Yeah, yeah.

You might say, well, actually it isn't about being different, it's about being clear on what you can offer and having a focus. But I don't know if you can incorporate that when we think about the go-to-market piece, because you did, you did say on that go-to-market plan, like, being really clear on, like, what you deliver, what you focus on.

For sure.

But yeah, let's, let's just see where we end up on, like, the go-to-market strategies that you've seen play out well. For companies.

Yeah. And I think one important bit of that is that this is changing all the time.

Yeah.

This is different from what it was 18 months ago. And I don't mean just because the recruitment climate has changed and we're not in a post-COVID boom anymore, but I also mean, you know, how people engage with prospective vendors and suppliers is changing as technology changes, as sales channels evolve, right? So suddenly people are being inundated with, you know, massive amounts of cold email that they weren't previously because access to email data is much more available than it was. Access to kind of mass mailing and sequencing technology is more available than it was. Uh, you know, got AI copywriting creeping in that makes it easier for people to build entirely sort of spammy loops that just blast out, you know, messages to all and sundry. So people are becoming harder and harder to sell to from a cold perspective in a traditional sense that would have worked, I don't know, 5, 10 years ago, right? So virtually nobody within our network of business owners is getting a huge amount of mileage from emailing a bunch of mailing lists with ice-cold, carefully crafted conversation starters to people that they don't know and haven't researched, nor are they getting a massive amount of mileage from just hammering through a bunch of cold calls. What I would say that the one kind of commonality that is like the binding thing that everybody that we work with who is having a lot of success does well is they've got some kind of tactic or they've got something in their arsenal that means that the majority of the work they're doing on the BD side has, has been moved from ice cold to somewhere that is approaching warm somehow. So first thing is personal brand. So, so most businesses that launch where the founder really invests in their personal brand, putting out really good high-quality LinkedIn content— again, the saturation happening because a lot more people are doing it than they were. But that's the first thing that is a real differentiator for most people is just the feeling that if I can get in front of my target audience and give them some insight into who I am, how I operate, what my network looks like, what I spend my days doing, the kind of conversations I'm having, you know, by osmosis, when they then go to do their outreach, that has already given them a huge leg up versus somebody that doesn't invest in personal brand. Because people feel like, seen you on LinkedIn, know a little bit about you, feel like I already know you to some degree, far more likely to engage.

It's one of your biggest assets when you launch a business.

Massive.

Just quick side note on this, sorry to butt in, but you would have seen this as well, and I see this a lot. Why do you think that found— that people that become founders, if we were to look at their LinkedIn when they're employees, they weren't posting? And then I've seen this a lot. Yeah, like, and then they're like, launched my business with RecruitHub on my own, and now they're like doing it consistently. But I've seen that a lot. Is it just this sort of freedom? Maybe it's something they've always wanted to do. I'm sure there's a multitude of things, but I've seen that quite a lot. I don't know if you've noticed that, but maybe seen that.

We see it all the time because we, we have onboarding cohorts of people all starting businesses. And we, you know, we, I literally was in one of these yesterday where, you know, we have people saying what's really been valuable for me over the first 60 days has been getting my name out there on a one-to-many basis.

Yeah.

And just, and it's also like, it just opens so many doors and possibilities that you can't do through, through sort of like, let's say, direct email, is you're able to soft sell, you're able to humble brag, you're able to share feedback and social proof, and, you know, 100 different things you can do that it's just really difficult to stuff that into somebody's inbox. You can't. So why do they do it when they set up? I think probably you're dealing with— yeah, one part of it is probably just they're totally liberated. They feel like this is just— I don't— I haven't got a brand that I need to represent in this way. I can have opinions on stuff, you know, that I'm uncomfortable sharing previously, maybe in case they, you know, get yelled at. I don't know. Um, but you've also then got— they haven't got a database, they haven't got a brand, they haven't got that tailwind. They can't just, you know, grab an interesting candidate and chuck it out to 500 people in the CRM that already broadly know them and get some bites. But so BD is their absolute number number one priority. So I think they just chuck everything they've got into it.

Yeah. And then just another side note— sorry, I don't know if you run into this because you went here straight away on the, like, leveraging their brand or trying to do things that makes things semi-warm. What about companies saying, we own your LinkedIn, so we're taking that when you leave? Have you seen— have you run into that? Yeah, because, like, because that is an asset straight away that you have to your advantage. You're not gonna have the database, you're not gonna walk away, you can't export stuff. That'd be very naughty. Yeah, but you've got your LinkedIn. Yeah, I've seen that quite a few times. Is that happening less? Like, there's a period where I run into like a few people and they're gone, thanks for posting that because my old company did that to me.

Yeah.

Have you run into this? Is that—

ran into it yesterday.

Really?

Literally yesterday.

Yeah, he was still trying to do that.

Yeah, yeah. We set this up for you and we shut it down for everybody that leaves the business. And, you know, they fund it, they pay for it, it's a professional tool. Um, Our advice is always pick your battles, right? If you've got loads of different things that you're trying to deal with on your way out the door, you know, we've had people that said, I, I probably could fight that. There's, there is legal precedent. Um, but yeah, it still happens a lot. Still happens a huge amount.

So something to be mindful of.

Yeah, yeah. But you know, again, it's, it's, um, can we avoid that?

Can we just make sure if I'm listening to this and I'm an employer, I'm paying for my LinkedIn, not my LinkedIn recruiter, but certainly helps.

Yeah, certainly helps. Um, yeah, I think, I think it's— it— we see it most when it's like a really aggressively enforced company policy.

When you join, we are immediately treating this as we set it up for you.

This is, this is a professional tool. This is not you, this is us, right? Even kind of, you know, you have your personal LinkedIn and you've got a professional LinkedIn.

Yeah. Okay, so golden thread go-to-market that you've seen, and I've seen this as well, so it's interesting you said that. They're— I think, yeah, safe to say, I think you experience this even more when you're a business owner, which comes a lot in my— up in my conversations, where you pro— you say you just start your own business, you're a founder, fast forward 90 days, you can bet you've had a shitload of emails, people trying to get your attention. You really experience this, I think, when you become a business owner. So I think founders can really understand that actually, yeah, like, I'm gonna get lost in all that noise if I'm just trying to grab people's attention and trying to sell to people just by getting in their inbox and these things. So if that's the golden thread, what else have we seen then work in those first 6 months that people really double down on, or that you've always seen play out?

Yes, I guess like there's different ways of doing this, but they're all very— a lot of them are variants on that theme, right? So, so a lot of podcasts is really obvious. We've got, we've got loads of people that we work with that have podcasts. And it is, you know, again, it grows in terms of how many there are in the market. There's a saturation point, I'm sure, in the future, but it's a real silver bullet to be able to get quality, you know, time with somebody who is a high-value potential customer. That is very difficult to engage, certainly at that level and with that kind of, you know, one-to-one focus purely on can I be a new staffing vendor for you, right? So that's one thing. We've got customers that run roundtables in person, roundtables that are virtual, which have been very successful. We've got customers that run mentorship schemes. We've got customers that create, you know, valuable content. And it doesn't have to be tremendously expensive, complex content, but they are adding value in a first exchange, in a first bit of outreach. And that for them is hugely beneficial. I mean, we've got people that their first go-to-market approach will be looking, you know, simple stuff, but looking at sort of all of the candidates that are de-restricted that they have worked with previously that they didn't place, but that they had some relationship with. Who are now in other organizations, and that's the first place they go to, is looking at everybody. The big commonality is how can you find people that already know you to some degree, and you've already done that really difficult stage of breaking the ice. So, and this is a funny thing that we have with a fair few founders in their first kind of year or two, is that they'd say like cold BD is really, really hard. They're billing fine, doing well, on target, everything is good, but they're frustrated because they're saying, oh well, you know, they're all just people that I used to know as candidates. And sometimes we have to kind of sit down and say, but that's not something to be kind of— not be happy about, be cross about, be hard on yourself about. Because the reason that they're working with you is because you've built the relationship. You built the relationship in a candid capacity because that was how you could get the conversation for them to say, well, actually, you really know your stuff. You know, you're somebody I enjoy interacting with. Your network is like, from the conversation we've had, clearly pretty extensive. You're evidently super well positioned to be the recruiter they want to work with the next time they've got a really difficult need. but it's immensely difficult to convey that from ice cold over cold email. So it's looking for those opportunities to kind of just build those relationships, add a bit of value, give people something that gets them to interact with you that isn't necessarily going route one, banging on the front door going, seen you've got a vacancy, can I fill it for you?

Yeah, yeah, nice.

That's, that's almost, that's almost the last, fair, on, on the scale of likely responses.

Yeah, I think it's such like when you go out on your own as a recruiter, it's a real test of like how good your relationships are. Because when you're a great recruiter, and I hear all the time, people will come to you, they will follow you, and they only do that if you've got a sort of relationship. I'm sure people learn that the hard way, like, shit, I actually didn't have a good relationship with Edmund as I thought I did. Um, so a couple of other things then. I'm really passionate of the belief of like, if you only have one way of working with a client, I think you're missing a trick in terms of like, if I speak to you about working together and I'm only presenting to you that we can work in this way, you pay on, you know, on completion, percentage of the salary, whatever. So the— how— what do you see play out in this sort of like, you know, contingent, exclusive, normally the products retain, mini RPO, whatever? I just think it's a bit of a missed opportunity if you, you just have one way of me and you working together. Do you know what I mean? So I'm a big advocate of that, but I don't know what you see is like— is a good place to start, or at least think about, because this comes into your offer then as well, doesn't it? Sure.

Yeah.

How do you think about this? What do you see?

So, so a couple of things that I think we see really consistently across people that we work with when they launch— they will— they— if they've come from a contingent background, they'll do more retained work than they've ever done before in their life. Really? 100%.

That's interesting.

Every time. The reason being because they are suddenly massively protective of their time and very defensive of, am I actually going to get paid for this? Because, you know, clock is ticking. I've got limited runway. If I'm going to work a search, I need to know I'm going to get paid. So they are very predisposed to say, I didn't have the gumption to ask you for this when I used to be an agency. But right now, if you want me to work on this, I need to know I'm going to get paid. So they gravitate naturally to pushing more for retained relationships. But they do that in different ways. And I think like the way that we often see people do that successfully is because they're going out mostly representing in the early days, right? They're representing themselves and their track record. They're not representing a brand necessarily because realistically there isn't much of a brand. Everybody can see this business is just you and they can see this business is 2 months old. So you can't spin much of a yarn around this is our wonderful legacy and capabilities because it's clearly dross, right? So what you are offering is this is me and you're getting me at this point in time. Therefore, if you position yourself effectively because you have mapped, you know, against the right niche, which you really are genuinely, you know, expert at filling these roles in, you're able to demonstrate first up, I'm exceptionally well positioned to fill this position. If you're going after the right business, you should be able to put together a very, very compelling presentation that I can fill this, right? Then it becomes a question of But I'm not going to do it for free. And then it becomes a natural question of, okay, great. So if you really need this filled, then this is how it works. This is how it works. And it's best for everybody because then I can do this, this, and this. And it's no longer kind of puffing up a product for the sake of trying to say, hey, I've sold a retainer. Because what you really do need is you need a client that's like, yeah, I'm intending to pay you. And you're like, great. Well, if you're intending to pay me, then, you know, get me engaged on it. Get some of my time, get some of my attention. So we do see a big swing towards retained. But to your point, 100% would not encourage people to go out and say retained or nothing because they will leave opportunity on the table. So normally what it is a question of is working with your client to show them pretty much this is, this is, this is, this is how you get the best out of me is this structure. And there's different ways they can do it. They can de-risk it for the client. They can offer SLAs and refunds and all kinds of stuff that makes it a bit less scary than a conventional exact search of, you know, 33% upfront and you may never see us again. So they can be very flexible that we've got customers that do, you know, smaller retainers or deposits or engagement fees or anything that just gets a client to make some commitment that says I can really count on this being a fee unless it all, you know, goes up in smoke for reasons that none of us can see now. But then there's obviously a spectrum from there. And if a client really absolutely does not want to do it, first of all, that's a big sign that you know, there's a, there's a, there's a kind of qualification flag waving there about this role in the first instance. Why would they not be happy to fully engage you if they fully intend to fill the position with you and fill it, right? Is a question. If you're comfortable with the answer to that question, you just need to let your client know, in my opinion, that you have retained searches, that there is essentially— you don't want to be as naked as this in the way you explain it, but there is a prioritization of roles and the service level that they can expect from you will be slightly different. So you'll absolutely go and sort of, you know, look at your network and see who you can find and suggest profiles. But it might be that, you know, you sort of shake the tree of your network and send some people across, and if nobody fits, nobody fits. And what we encourage founders all the time is to look at their pipeline of live roles when they're in the early phase of building the business. And if they've got— and if they're working anything that isn't really highly qualified, they should be trying to constrain the amount, limit the amount of time they spend on those searches. And that is your signal that you need to go and win some committed business. Because one of the biggest mistakes anybody makes is they're so desperate to get fees in and get some cash in that they'll work poorly qualified, you know, searches that in their heart of hearts they know are not really premium, not really fully committed, that they would have coached their team to stay away from. But they'll put all their eggs in that basket and they'll just kind of put their fingers in their ears over reality and hope that it happens. And then when it doesn't happen, you know, they've lost a lot of time on it.

A couple of just final bits on data points I think would be interesting for people. What if my plan, my plan's right, I'm a lot in the green and amber, and like how you help people assess these things, what have you found to be the typical average time to do my first placement? Typically, I know it'll vary, but out of interest.

Yeah, so, so I'll go and dig up the latest stat, but something in the range of about 80% of the businesses that we launch will bill within their first 3 months.

Nice.

We had somebody that billed in their first, I think, 3 days recently. Sold a retainer on day 3.

That's class.

So, so yeah, we would say that we would highly, highly anticipate, and we typically forecast, that there are fees being booked within 90 days.

Love that.

It's pretty realistic.

And then this is a slightly different one, but I feel like again you'll have good oversight of this, and there definitely isn't— there's a lot that goes into it, your risk appetite, these things, but it's something that comes up a lot with solo founders. When we're managing our money, what's like good habits around runway when hiring? I don't know, I get a lot of questions around that. I'm sure you've had that. Again, there isn't a silver bullet. Your risk appetite might be different to mine, and it is— it can be personal.

Yeah.

But what I think that might do— what's general advice there that could be helpful for people?

So, so I think, yeah, it is absolutely— I mean, tolerance for risk is one thing, right? So the very, very sort of thin end of the spectrum, you have people that were hired with 3 months' runway. But, you know, probably more commonly looking at 6 months' runway through to, at the very sort of, you know, more conservative end of the spectrum, 12 months' runway, which is usually, I would say, it's a smaller group of people that would want to have that much cash in the bank. Depends on the size of their business is the first thing, you know. So your ability to be able to continue to extend your runway when you're small is obviously massively greater than it is if you've got a much larger business to run. The other thing that we tend to kind of spend time with people on is sort of understanding that it is also not just a question of how much cash do we have in the bank. It's also understanding a bit more about your business's finances in terms of, for example, you know, your net cash flow over the last 3 months, the diversification of your pipeline, your fill rates, etc. There's loads of other data within your business that it's helpful to understand so that you can have a view on is 3 months terrifying or is 3 months absolutely fine? Right, so, so there's a lot of other factors that come into play. So we've got a bunch of kind of calculators and tools we use with people on that point so that they can make an educated sort of, you know, assessment of what is actually the cash held in my business.

Yeah, yeah, yeah. And then, right, let's just like hit this head on then. So like, I've, I've spoken to a lot of people that have partnered with you guys, and I do feel like You can tell me what you think of this, but I do think obviously the opportunity that you've taken, and I'm sure you always think about how you can improve things and do things better, is this sort of perception of what companies like you do do is can often be painted with like it's just sharks trying to take your money basically, right? And it sort of goes against this initial idea and motivation of I'm leaving because I want to earn all of the fee or have all of the pie, right? And I think there's plenty of horror stories that have been shared, or horrible stories out there that have gone— not that pun— recruitment, recruit hub. Well, I've— Edmund invested in my recruitment business and actually they get most of the money and it hasn't quite sort of been what it is. So what, like, I just love you to share like pros and cons really in terms of really the way that I see it. If I'm speaking to a recruiter that's ambitious that really has the right drivers, wants to go out on their own, the options I have really are I can self-fund this thing, I can do it, I can save up some money, I can take the risk, I'm going to figure it out, do what I need to do, make it happen. I've then got options where I can directly have investors, and that might involve different things, but what it normally means as a basic level is they might have 50% of my company, maybe 60%, So I won't own all of my company, and then along with that I might get advice, I might get financial, um, financial backing, I might get back office support. And then I feel like then you're in your own sort of category almost in terms of like, you don't work that way, do you? It's not like an equity play. No, it's if we— if I perform and I hit my plan and my projections, then RecruitHub benefit because we've enabled that, we've played a part in that. So what, what are like the pros and cons here, do you know what I mean? I know it's personal, but like, what are like the main pros and cons? Because I think there is this perception of like, well, if I'm gonna go out on my own, I'd rather keep all the money. Sure, it isn't as simple as that.

Yeah, yeah. So, so yeah, it's a great question. I guess we started our business because we looked at the options that people had to get support in starting, you know, a recruitment or staffing company, and we felt you've got a lot of businesses that have been operating for, in some cases, 25 years that do some back office processing. And to be fair, do it really well. But, but from, from my experience and knowing the market, it's really obvious that that is a very small part of what you need in terms of support to genuinely thriving and growing your business. So we, we looked at that and thought, that's great for what it is. But it is incomplete. It's definitely not the full solution. We then look at the other end of the sort of, uh, this what is essentially a spectrum, and you've got sort of joint ventures like the one you described where people will have a sort of, you know, primary objective of getting equity in the business for equity financing, which again, like, it's got its place and some of those deals work out really nicely for people. But I think one of the first things that we looked at was, whoa, your launch costs for these businesses are not large, right? So it's very unlikely that you need a very significant equity sum. And some people do because they're building large businesses and they need to scale headcount from day one, and someone's got to, you know, foot the bill. But for most people who are organically launching, the need for large amounts of equity financing is negligible, right? So most of the customers that we work with will have launch costs somewhere between sort of $15,000 to £30,000, for example, which they'll either entirely self-fund or they'll look at debt financing options, you know, startup loans. There's some government-backed schemes that are very helpful, and they can go and say, great, I will get some of that and pay it off at a rate of a few hundred quid a month, right? So the rationale for them to say someone should own 51% of this is, is, is just not there. That was one of the things that was really important for us. Um, so, so, so having a big sort of chunk of equity has never been our objective. To kind of get to your point on what are the pros and cons, we do speak to people who feel very passionately, I want to control and run manually, not just have control over, but physically myself operate every little bit of my business. And in that situation, working with a business like ours isn't a fit, right? Those are the kind of people that potentially, I don't know, change the oil on their own cars because they're handy and they like to do everything. And some people feel that's what entrepreneurship is, is doing everything. Anything. And, and that's, that's got its place, and some people want to do that. Um, on the finance point, I suppose, in, in the cost point, there is also a slight misconception that there is an option to do everything for free, right? So some people think, oh, you know, there's— I don't want to have anybody, you know, associated with my business in, in any kind of a kind of support capacity because I want to do it all myself. But doing it all yourself still has costs. So for most of our customers, by the time they've reached a certain point in their trajectory, you know, our commercial arrangement with them is probably adding a few percentage points to their overall, you know, operational overheads for which they get, you know, all the benefits that we provide, right? So if we kind of look at what is the sort of most impactful of those, in the early days of the businesses, it's speed to market. So they launch, we obviously run through a very comprehensive kind of process in supporting and building and launching their firms, which enables them usually to be engaging clients on the first day of launch.

I'm hitting on average that 3-month mark.

Right?

Right.

We kind of go back through what we've looked at in terms of recent launches. We had a business that launched 2 and a half months ago, did $170,000 within their first two months of operation because they had absolutely nothing else to do other than tunnel vision focus on the bit that fundamentally really matters which is clients and candidates. Nothing to do with infrastructure, nothing to do with technology, nothing to do with brand compliance finance, none of that stuff. All just focused you know, out of their sort of field of vision, just focus on the thing that really moves the dial, which is fees, right? So that's the first thing. Secondarily, over time, it's, it's, it's the compounding effect of being able to compress the time it takes you to make decisions within your business. And this all comes back to the same thing. When, when, before we launched the business, we, we met with loads of founders of independent businesses and we asked them this key question, which is, how much of your time do you spend on revenue generation and growth. And we polled them, and the broad answer was sort of 60% of time is in that sort of high productivity area where I'm either, you know, expanding the client base, where I'm actually placing people and making, you know, creating fees, or I'm growing my team. 40% of my time on average is admin, back office, finance, compliance, and figuring stuff out.

And there will be months, quarters where that really spills into like 50%, 60%.

So we looked at just the very basic economics and said, you've got somebody here who's a million dollar a year biller, and you take away 40% of their time, take away $400,000 that they can bill. Simplified, but it's not entirely wrong. So the key thing is enabling people to focus on the high-impact areas of their business. And that is kind of an ongoing thing. And I think the other thing that we looked at when we first set this business up was this. There are so many things that will come out of the woodwork when you run a company, which you must have experienced yourself. Oh yeah. Come out of the woodwork, and they're all new. And because they're all new and you're the only person within your company, you have to— you have to solve them, right? If you don't do it, it physically won't happen because there's nobody else that can do it. So all of these things have essentially kind of a long learning curve that we felt could be hugely shortened because you should be able to interface with a business or a partner or somebody who can help you get the measure of the problem that you're grappling with or the unexpected or the unknown thing that's cropped up. And help you condense the amount of time you need before you can figure out how do I handle this.

Yeah, nice.

Does that make sense?

Yeah.

Sorry about the interruption, guys, that'll be next.

No worries, mate. We're just about to wrap up, mate.

Yeah, I'll just tell them to wait up.

Yeah, no worries, mate. I've got 5 or 7 minutes, mate.

That's alright.

That's gone ghost quick, didn't it? I told you it goes quick, mate.

Wow. Yeah, it does, mate.

Yeah. Just teeing you up to wrap this up, mate, which is why I was sat here.

That's fine, that's alright.

Um, so we were right for 5, mate. Is that all right? Yeah, yeah, all right. Um, I mean, you finished that anyway, so I guess to sort of round this out then, I think the other thing, just the other bit that I wanted to make sure that we shared, because I thought it was also interesting how you did it, and let me know if this is wrong, but I think the other thing that I like about how you've approached it is ultimately it is a joint venture in the sense of like, if I perform really well then RecruitHub gets paid. Like, it works in that way, doesn't it? In terms of like, if I'm billing, yeah, then I'm gonna be— like you said, it then adds to the operating cost because then some of that money is going to RecruitHub versus straight from the beginning I'm paying you, right?

Well, so there's a couple of things. Our fees do have a break, right? They are capped, right? There's no scenario where somebody goes on— no, no. So our fees are structured so that they remain a sort of reasonable portion of operational overhead. But yeah, what it ultimately creates is that synergy, right? If it's in the best interest of the business, if it's something that we can do that helps the businesses that we support, we do it. Whether it's developing resources, spending time, we are commercially, you know, completely aligned, which is the really valuable part for us.

Yeah, no, I agree. And then the other bit, again, correct me if I'm wrong, but from people that I spoke to, Is there also like— also like, this isn't like once I've launched RecruiterHub, it's like forever, or is that right? Is that wrong?

No, it's not.

So that's what I mean. Yeah, I don't, I don't know if it's changed, but it's about to— different people's like, yeah, you can sign like a 3-year partnership and then you have the option to be like, well, I'm not going to be part of this now, right?

I think that 100% it's their business. That's why I also like we have a minimum term. After the minimum term, they can decide what they do. They own their IP, they own their brand, it's their company. We support them through a minimum term of partnership after which they decide what they do. Off the top of my head, I think we're at something like 85% of customers that have reached an end of term renew. So stay working with us on the platform because the synergies is ongoing. But they are perfectly entitled to say, you know, great, this was fantastic, really helped me, you know, get out the starting gates, get the plane off the ground. I'll take it from here. I'll internalize all the operational support. They can do that. There's nothing stopping them from doing that.

I just like that because like imagine the cost if it was an equity play.

Right.

So that, that's why I just think, like, again, I feel like what you've already done and you've had to deliver on, obviously, is like, it's like it is a joint thing. And if you're successful, we're successful, do you know what I mean? And I, I don't think there'll be a lot of stories out there where people maybe didn't think of, uh, it wasn't in the person actually launching the business interest, it was actually for the person that financially was helping it make hap— make happen.

And, and this is something that we spend a lot of time with people on in terms of kind of digging into their numbers. When— so we've chatted with people that come to us and go you know, I'm thinking about doing this, somebody's offered me, I don't know, 100 grand to help start the company and they, they'll go for X percent. And what we'll do is we'll sit down and say, okay, cool, but just so that you understand this, let's look at the long-term ROI for the investor if you hit your projections, right? So not only are you potentially paying them out in the event of, you know, an acquisition or a liquidity event, whatever kind, but you're also presumably sharing profits. And let's look at that if your business operates for 10 years, 15 years, whatever it does, and then you do have some kind of an event, and we look at that, you know, this is essentially, you know, what you're giving away. You know, the analogy is that sort of helpful is like if somebody said to you, look, you know, you're buying your first property. If I spot you the first 5 months of the mortgage, can I have 60% of the house? Right. Or you can figure out another way to get 5 months worth of cash together to be able to pay yourself. Right. So the long-term economics of it, it's very, very hard to find a situation, as I said earlier, where if you can afford to find a way to get the business off the ground, it's not massively to your advantage in the long term in terms of keeping all the upside.

Yeah, I mean, I appreciate sharing with those insights. I think generally you're so well positioned to talk about these things, which is really cool. So thank you for joining me and thanks for coming on the pod.

Pleasure. Thanks for having me. Cheers.